Iran Parliament Sets Rules for Establishing Financial, Credit Institutions

EghtesadOnline: Those wanting to establish business in the monetary market, namely establishing credit institutions, setting up branches and offices, attracting public deposits in any form, offering payment, and any kind of activity in the payment system…must acquire permit from the Organization for Supervision Over Credit Institutions, the spokeswoman of Majlis Economic Commission said.

News ID: ۷۸۴۱۷۰

13 October 2018

Zahra Saeidi Mobarakeh said the organization is obliged to publish names of all licensed institutions and branches and inform the police and the judicial system, IBENA reported.

She made the above statements during the commission’s meeting on Wednesday in the presence of experts from the Central Bank of Iran, the Supreme Audit Court of Iran, and the Majlis Research Center to discuss rules in the Comprehensive Banking Law.

The Comprehensive Banking Law is an umbrella term used for wide-ranging reforms to the dysfunctional banking system and the CBI devised by Parliament and the government. It incorporates four reform measures, namely a banking plan devised by lawmakers, a central bank reform plan, an initiative to establish the Islamic Development Bank and a scheme for rewriting the decades-old banking laws, according to Financial Tribune.

Saeidi Mobarakeh added that after the review of Article 82 of the comprehensive law by members of the commission, banks and credit institutions will be obliged to revise their statutes within three months after the law is passed and send it to the CBI for approval.

“If the law is passed, the central bank will have more powers,” she noted.

Earlier, the head of the Monetary and Banking Committee of Majlis Economic Commission Mohammad Hossein Hosseinzadeh Bahraini told state TV that a major part of the Comprehensive Banking Law targeting the struggling banking system and problems of the central bank has been approved. He said reforms will overhaul the CBI.

MEC members started reviewing articles of the long-awaited reform bills in August. They concluded the review on September 11. Back then, Saeidi Mobarakeh said the commission finalized the aspects that constituted about one-third of the banking reforms. The main goal of the parliament in presenting the reform package is to augment CBI independence and improve efficiency of the lethargic banking sector.

Weak supervision in the banking sector over the past several decades led to the emergence and mushrooming of illegal financial and credit institutions that inflicted immense losses on the struggling economy after some of the biggest ones went bankrupt forcing the government to take a lot of flak.